During the review period, French defense expenditure increased at a CAGR of XX.XX%, and, in 2010, valued US$XX.XX billion. The military modernization plans outlined in the French white paper on defense and national security, coupled with perceived terrorist threats and France’s status as the United Nations Security Council’s second-largest contributor to UN peacekeeping missions, stimulated defense expenditure during the review period. Such factors are expected to continue to fuel defense expenditure during the forecast period. As a result, and despite expected budget cuts during 2010–2013 to reduce the government’s fiscal deficit, the country’s defense budget is expected to grow at a CAGR of XX.XX% during the forecast period. With this growth expected to be accompanied by a higher growth in the general French economy, French defense expenditure as a percentage of GDP is expected to fall to XX.XX% by 2016, compared to XX.XX% in 2010.

The capital expenditure allocation of the defense budget, which stood at an average of XX.XX% during the review period, increased to XX.XX% in 2010 as a result of a military modernization program. Capital expenditure is expected to account for XX.XX% of the total defense budget in 2011, before stabilizing at an average of XX.XX% during 2012–2016. Common services such as health care expenses and defense infrastructure facilities accounted for the highest budget allocation during the review period, with an average of XX.XX% when other expenses such as research and development and pensions are excluded. During the forecast period, the French Army is expected to receive an average defense budget allocation of XX.XX%, followed by the Air Force with an average of XX.XX% and the Navy with an average of XX.XX%.

Key opportunities for the country’s defense industry are expected in areas such as armored vehicles, amphibious ships, and submarines with nuclear missile transportation capabilities. The French aerial defense capabilities are expected to be improved through the procurement of a new fleet of fighter aircraft, UAVs and the upgrade of its existing aircraft. The country is also expected to invest in advanced technology for command control and communication systems.

This report offers insights into market opportunities and entry strategies adopted by foreign OEMs to gain a market share in the French defense industry. In particular, it offers in-depth analysis of the following:

• Market opportunity and attractiveness: Detailed analysis of the current market size and growth expectations during 2011–2016, including highlights of the key drivers, to aid understanding of the growth dynamics. It also benchmarks the sector against key global markets and provides detailed understanding of emerging opportunities in specific areas.
• Procurement dynamics: Trend analysis of imports and exports, along with their implications and impact on the French defense industry.
• Industry structure: Five forces analysis to identify various power centers in the industry and how these are likely to develop in the future.
• Market entry strategy: Analysis of possible ways to enter the market, along with knowledge of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
• Competitive landscape and strategic insights: Analysis of the competitive landscape of defense manufacturers in France. It provides an overview of the key defense companies (both domestic and foreign) along with insights such as key alliances, strategic initiatives and a brief financial analysis.
• Business environment and country risk: A range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics, and political and social risk.

TABLE OF CONTENTS

1 Introduction
1.1 What is this Report About?
1.2 Definitions
1.3 Methodology
1.3.1 Secondary Research
1.3.2 Primary Research
1.3.3 Conventions

2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1 Defense market Size Historical and Forecast
3.1.1 French annual defense expenditure projected to reach US$XX.XX billion by 2015
3.1.2 Modernization of armed forces, terrorist threats and contributions to peacekeeping operations to stimulate defense expenditure
3.2 Analysis of Defense Budget Allocation
3.2.1 Capital Expenditure allocation expected to Increase during the Forecast Period
3.2.2 Capital expenditure expected to grow at a CAGR of XX.XX% during the forecast period
3.2.3 Budget allocation to common services the highest since 2006
3.2.4 Army expenditure expected to increase at a CAGR of XX.XX% over the forecast period
3.2.5 Air force expenditure expected to reach US$XX.XX billion by 2016
3.2.6 Naval expenditure estimated to total US$XX.XX billion during the forecast period
3.2.7 Common services capital expenditure allocation expected to average XX.XX% during the forecast period
3.2.8 Defense expenditure expected to reach XX.XX% of GDP by 2016
3.3 Homeland Security Market Size and Forecast
3.3.1 Homeland security expenditure expected to reach US$XX.XX billion by 2016
3.3.2 France falls under “some risk” category in the terrorism index
3.3.3 France has a terrorism index score of XX.XX
3.3.4 France expected to invest in emergency advance warning and information systems, and other surveillance and monitoring systems
3.4 Benchmarking with Key Global Markets
3.4.1 France has the world’s XX-largest defense expenditure
3.4.2 France expected to have XX-largest global defense expenditure by 2016
3.4.3 France invests XX.XX% of GDP in defense, the XX-largest allocation globally
3.4.4 France ranked XX among top global arms exporters during 2005-2010
3.4.5 France faces moderate risk of terror attacks
3.5 Market Opportunities: Key Trends and Drivers
3.5.1 France to invest in armored vehicles, infantry combat kits and long range rockets
3.5.2 France to invest in mistral class amphibious ships and nuclear attack submarines
3.5.3 France expected to improve aerial capabilities through investment in UAVs and fighter aircraft
3.5.4 Demand for command, control and communication systems is expected to increase

4 Defense Procurement Market Dynamics
4.1 Import Market Dynamics
4.1.1 The company acquires the majority of its defense equipment from domestic companies
4.1.2 Increased demand for improved early warning systems expected to increase advanced sensors and engine imports
4.1.3 Imports increasing from European nations such as Italy and Germany
4.2 Export Market Dynamics
4.2.1 France is the world’s fourth-largest exporter of defense goods
4.2.2 French export market expanding in Southeast Asian countries
4.2.3 Ships and aircraft constitute the majority of French defense exports

5 Industry Dynamics
5.1 Five Forces Anlysis
5.1.1 Bargaining power of Supplier: Low
5.1.2 Bargaining power of Buyer: Medium to High
5.1.3 Barrier to entry: High
5.1.4 Intensity of rivalry: Medium
5.1.5 Threat of Substitution: Medium

6 Market Entry Strategy
6.1 Market Regulation
6.1.1 France has no offset obligations for defense imports
6.1.2 Foreign direct investment in the defense sector is subject to prior official approval
6.2 Market Entry Route
6.2.1 Foreign military or direct commercial sales with technology transfers are the preferred entry routes
6.2.2 International product collaborations favored by the French government
6.3 Key Challenges
6.3.1 Government defense budget reductions expected to have a negative impact on defense companies
6.3.2 Restrictive foreign policies and support for domestic companies pose a challenge for the entry of non-European companies in the French defense market

7 Competitive landscape and Strategic Insights
7.1 Competitive landscape Overview
7.2 Key Public Sector Companies
7.2.1 Dassault Aviation: Overview
7.2.2 Dassault Aviation: Major Products and Services
7.2.3 Dassault Aviation: Recent Announcements and Strategic Initiatives
7.2.4 Dassault Aviation: Alliances
7.2.5 Dassault Aviation: Recent Contract Wins
7.2.6 Dassault Aviation: Financial Analysis
7.2.7 Thales: Overview
7.2.8 Thales: Major Products and Services
7.2.9 Thales: Recent Announcements and Strategic Initiatives
7.2.10 Thales: Alliances
7.2.11 Thales: Recent Contract Wins
7.2.12 Thales: Financial Analysis
7.2.13 Constructions Mécaniques de Normandie (CMN): Overview
7.2.14 Constructions Mécaniques de Normandie (CMN): Major Products and Services
7.2.15 Constructions Mécaniques de Normandie (CMN): Recent Announcements and Strategic Initiatives
7.2.16 Constructions Mécaniques de Normandie (CMN): alliances
7.2.17 Constructions Mécaniques de Normandie (CMN): Recent Contract Wins
7.2.18 Constructions Mécaniques de Normandie (CMN): Financial Analysis
7.2.19 EuroTorp: Overview
7.2.20 EuroTorp: Major products and services
7.2.21 EuroTorp: recent announcements and strategic initiatives
7.2.22 EuroTorp: Alliances
7.2.23 EuroTorp: Recent Contract Wins
7.2.24 EuroTorp: Financial Analysis
7.2.25 Cassidian: Overview
7.2.26 Cassidian: Major Products and Services
7.2.27 Cassidian: Recent Announcements and Strategic Initiatives.
7.2.28 Cassidian: Alliances
7.2.29 Cassidian: Recent Contract Wins
7.2.30 Cassidian: Financial Analysis
7.2.31 Safran Group: Overview
7.2.32 Safran Group: Major Products and Services
7.2.33 Safran Group: Recent Announcements and Strategic Initiatives
7.2.34 Safran Group: Alliances
7.2.35 Safran Group: Recent Contract Wins
7.2.36 Safran Group: Financial Analysis
7.2.37 Snecma: Overview
7.2.38 Snecma: Major Products and Services
7.2.39 Snecma: Recent Announcements and Strategic Initiatives
7.2.40 Snecma: Alliances
7.2.41 Snecma: Recent Contract Wins
7.2.42 Snecma: Financial Analysis
7.2.43 Nexter Systems: Overview
7.2.44 Nexter Systems: Major Products and Services
7.2.45 Nexter Systems: Recent Announcements and Strategic Initiatives
7.2.46 Nexter Systems: Alliances
7.2.47 Nexter Systems: Recent Contract Wins
7.2.48 Nexter Systems: Financial Analysis
7.2.49 MBDA: Overview
7.2.50 MBDA: Major Products and Services
7.2.51 MBDA: Recent Announcements and Strategic Initiatives
7.2.52 MBDA: Alliances
7.2.53 MBDA: Recent Contract Wins
7.2.54 MBDA: Financial Analysis
7.2.55 Eurocopter: Overview
7.2.56 Eurocopter: Major Products and Services
7.2.57 Eurocopter: Recent Announcements and Strategic Initiatives
7.2.58 Eurocopter: Alliances
7.2.59 Eurocopter: Recent Contract Wins
7.2.60 Eurocopter: Financial Analysis
7.2.61 DCNS: Overview
7.2.62 DCNS: Major Products and Services
7.2.63 DCNS: Recent Announcements and Strategic Initiatives
7.2.64 DCNS: Alliances
7.2.65 DCNS: Recent Contract Wins
7.2.66 DCNS: Financial Analysis
7.2.67 Renault Truck Defense: Overview
7.2.68 Renault Truck Defense: Major Products and Services
7.2.69 Renault Truck Defense: Recent Announcements and Strategic Initiatives
7.2.70 Renault Truck Defense: Alliances
7.2.71 Renault Truck Defense: Recent Contract Wins
7.2.72 Renault Truck Defense: Financial Analysis

8 Business Environment and Country Risk
8.1 Business Confidence
8.1.1 Business confidence indicator
8.1.2 Market capitalization trend - the Paris stock exchange, France
8.1.3 FDI inflows by sector
8.1.4 Deployment of credit by sector
8.2 Economic Performance
8.2.1 GDP at constant prices (US dollars)
8.2.2 GDP per-capita at constant prices (US dollars)
8.2.3 GDP at current prices (US dollars)
8.2.4 GDP per capita at current prices (US dollars)
8.2.5 GDP split by key segments
8.2.6 Agriculture net output at current prices (Euro)
8.2.7 Agriculture net output at current prices (US dollars)
8.2.8 Agriculture net output at current prices as percentage of GDP
8.2.9 Manufacturing net output at current prices (EUR)
8.2.10 Manufacturing net output at current prices (US dollars)
8.2.11 Manufacturing net output at current prices as percentage of GDP
8.2.12 Mining, manufacturing and utilities net output at current prices (EUR)
8.2.13 Mining, manufacturing and utilities at current prices (US dollars)
8.2.14 Mining, manufacturing and utilities at current prices, as percentage of GDP
8.2.15 Construction net output at current prices (EUR)
8.2.16 Construction net output at current prices, (US dollars)
8.2.17 Construction net output at current prices as a percentage of GDP
8.2.18 Crude steel production
8.2.19 Crude oil consumption
8.2.20 Inflation rate
8.2.21 Fiscal balance as a percentage of GDP
8.2.22 Current account balance as a percentage of GDP
8.2.23 Exports as a percentage of GDP
8.2.24 Imports as a percentage of GDP
8.2.25 Exports growth
8.2.26 Imports growth
8.2.27 Annual average exchange rate US$–EUR
8.2.28 End of the period exchange rate US$–EUR
8.3 Infrastructure Quality and Availability
8.3.1 Total airports and sea ports
8.3.2 Railways and roadways
8.3.3 Passenger vehicle production volume
8.3.4 Commercial vehicle production volume
8.3.5 Automotive components exports trend
8.3.6 Automotive components imports trend
8.3.7 Passenger car penetration
8.3.8 Total installed capacity for electricity generation
8.3.9 Installed capacity for the generation of conventional thermal electricity
8.3.10 Electricity production
8.3.11 Installed capacity for the generation of hydro–electricity
8.3.12 Installed capacity for renewable electricity generation
8.3.13 Electricity consumption
8.3.14 Electricity exports
8.3.15 Electricity imports
8.3.16 Healthcare expenditure
8.3.17 Healthcare expenditure as percentage of GDP
8.3.18 Healthcare expenditure per capita
8.3.19 Total internet subscribers
8.3.20 Broadband internet subscribers
8.3.21 Personal computer penetration rate
8.3.22 Mobile phone penetration rate
8.3.23 R&D expenditure as a percentage of GDP
8.4 Labor Force
8.4.1 Labor force
8.4.2 Unemployment rate
8.5 Demographics
8.5.1 Annual disposable income
8.5.2 Annual per capita disposable income
8.5.3 Annual consumer expenditure on food
8.5.4 Annual per capita consumer expenditure on food
8.5.5 Total population
8.5.6 Urban and rural population
8.5.7 Female percentage of population
8.5.8 Male percentage of population
8.5.9 Mean age of population
8.5.10 Median age of population
8.5.11 Population density
8.5.12 Age distribution of the total population
8.5.13 Age distribution of the male population
8.5.14 Age distribution of the female population
8.5.15 Number of households
8.6 Political and Social Risk
8.6.1 Political stability
8.6.2 Terrorism index
8.6.3 Transparency index

9 Appendix